JDR Industries, Inc. v. Vance

United States District Court, D. Nebraska

April 18, 2017

JDR INDUSTRIES, INC., Plaintiff,v.JAMES L. VANCE, et al., Defendants.

MEMORANDUM AND ORDER

John
M. Gerrard United States District Judge

The
plaintiff, JDR Industries, is suing the defendants, Michael
E. McDowell, James L. Vance, LaGrange Supply Co., and J.L.
Vance, LLC for various claims pertaining to the
defendants' sale of LaGrange welding rod. Currently
before the Court is JDR's motion to dismiss a party
defendant (filing 158), which will be granted, and its
renewed motion for summary judgment (filing 159), which will
be granted in part and denied in part.

The
plaintiff, JDR Industries, is a Nebraska corporation that
produces and sells welding rod under the name
"LaGrange." JDR traces its ownership of the
LaGrange mark through a chain of predecessors in interest
beginning with LaGrange Equipment Company ("LEC").
LEC sold LaGrange welding rod from 1970 to 1985, when its
creditor-Ralston Bank-took ownership of its assets. Filing
162-8 at 2; filing 162-11 at 2. Those assets, including the
rights in the LaGrange name, passed to TGS Marketing, Inc.,
and ultimately to JDR. Filing 162-11 at 4. Thus, together
with its predecessors, JDR has used the mark in connection
with the sale of welding rod since at least 1970.

Defendant
McDowell was a former employee of LEC. See filing
162-20 at 5. When LEC closed in 1985, he partnered with other
LEC regional sales managers and continued to sell
distributorships on their behalf-essentially continuing in
his previous capacity, despite the company's closure.
Filing 162-20 at 8-9. In or around 2007, McDowell began
selling welding rod on his own, out of his garage, using the
LaGrange mark. Filing 162-20 at 10. He continued in these
sales under the business name "LaGrange Supply Co.,
" which he registered as a trade name with the Nebraska
Secretary of State in July 1997, and renewed in 2007.
See, filing 162-20 at 25; filing 163-9 at 1-5. At
some point in 2014, McDowell formed defendant LaGrange Supply
Co. (LG Supply), a Nebraska limited liability corporation.
Filing 162-20 at 54. He then assigned his interest in the
LaGrange Supply Co. trade name to his LLC. Filing 162-20 at
56.

In
2013, McDowell was contacted by defendant James Vance, who
was-until his December 2013 termination-employed by JDR as a
telemarketing salesperson. See, filing 162-20 at 32;
filing 162-21 at 8. Vance and McDowell had a meeting and
eventually reached an agreement regarding the sale of
LaGrange welding rod. Pursuant to that agreement, McDowell
purported to authorize Vance (and his LLC, defendant J.L.
Vance, LLC) to sell, through telemarketing, welding rod
branded as LaGrange and to use the LaGrange Supply Co. name.
Filing 162-20 at 35; filing 162-21 at 120. In return, Vance
agreed (among other things) to pay a percentage of his
proceeds as a royalty and to be subject to certain quality
control standards. Unlike McDowell, who had relied primarily
upon people calling him, Vance commenced telemarketing
operations, including making sales calls to JDR's
clients. Seefiling 162-20 at 49-51.

JDR's
president avers that, within approximately 1 month following
Vance's termination, JDR learned, from contacts with its
own customers, that defendants and their
"agents/licensees" (i.e., Vance) were directly
contacting JDR's customers, including those customers
Vance had previously serviced while employed with JDR. Filing
162-8 at 8. Since then, JDR has begun tracking instances of
confusion by its customers and others, and JDR has documented
numerous instances in which a customer has expressed
confusion concerning defendants' use of the LaGrange
name.

(b)
Procedural History

JDR
filed suit in September 2014, alleging, among other claims,
trademark infringement, unfair competition, and deceptive
trade practices. At that time, McDowell and LG Supply were
the only two named defendants. Soon thereafter, JDR moved for
partial summary judgment, arguing that it had satisfied
certain elements of its claims. See filing 34.
Specifically, JDR argued that (1) it owns a valid and legally
protectable trademark (i.e., the LaGrange mark), and (2) that
McDowell and LG Supply used the mark in commerce without
JDR's consent. Filing 34 at 1. The Court, in an August 4,
2015 Memorandum and Order (M&O), granted JDR's motion
as to both elements. See filing 55. Accordingly,
those issues-at least as they pertain to McDowell and LG
Supply-are no longer in dispute.

Following
the Court's M&O, JDR amended its complaint, adding as
party defendants James L. Vance and J.L. Vance, LLC
("JLV"). See filing 63. It asserts the
same claims against Vance and JLV as it does against McDowell
and LG Supply-that is, trademark infringement, unfair
competition, and deceptive trade practices. JDR now seeks
summary judgment against Vance and JLV "on the same
issues and on the same grounds as previously entered against
Edwin K. McDowell and [LG Supply]." Filing 159 at 1. It
also seeks judgment as to each defendant on the remaining
element of its claims: whether there is a likelihood of
confusion between JDR's mark and the defendants' use
of that mark. Filing 159 at 2.

It is
also worth noting that both defendant entities (LG Supply and
JLV) are in default, and that Vance, proceeding pro
se, has not responded to JDR's present motion.
See, filing 113; filing 130. Further, Edwin
McDowell- the primary subject of JDR's suit-has died.
See filing 109. Following his death, JDR substituted
McDowell as a party defendant with his son, Michael McDowell,
as the personal representative of his father's estate,
and as trustee of the Edwin K. McDowell Revocable Trust.
See filings 140-142. But the aforementioned trust
has been terminated, so JDR now moves to dismiss Michael
McDowell as a party defendant "in his capacity as
trustee of said trust only." Filing 158. That motion
will be granted. So, while the Court will refer to the
actions of Edwin McDowell below, JDR's claims are
actually against his son, Michael McDowell, in his capacity
as personal representative of his father's estate.

STANDARD
OF REVIEW

Summary
judgment is proper if the movant shows that there is no
genuine dispute as to any material fact and that the movant
is entitled to judgment as a matter of law. SeeFed.
R. Civ. P. 56(a). The movant bears the initial responsibility
of informing the Court of the basis for the motion, and must
identify those portions of the record which the movant
believes demonstrate the absence of a genuine issue of
material fact. Torgerson v. City of Rochester, 643
F.3d 1031, 1042 (8th Cir. 2011) (en banc). If the movant does
so, the nonmovant must respond by submitting evidentiary
materials that set out specific facts showing that there is a
genuine issue for trial. Id.

On a
motion for summary judgment, facts must be viewed in the
light most favorable to the nonmoving party only if there is
a genuine dispute as to those facts. Id. Credibility
determinations, the weighing of the evidence, and the drawing
of legitimate inferences from the evidence are jury
functions, not those of a judge. Id. But the
nonmovant must do more than simply show that there is some
metaphysical doubt as to the material facts. Id. In
order to show that disputed facts are material, the party
opposing summary judgment must cite to the relevant
substantive law in identifying facts that might affect the
outcome of the suit. Quinn v. St. Louis County, 653
F.3d 745, 751 (8th Cir. 2011). The existence of a mere
scintilla of evidence in support of the nonmovant's
position will be insufficient; there must be evidence on
which the jury could conceivably find for the nonmovant.
Barber v. C1 Truck Driver Training, LLC, 656 F.3d
782, 791-92 (8th Cir. 2011). Where the record taken as a
whole could not lead a rational trier of fact to find for the
nonmoving party, there is no genuine issue for trial.
Torgerson, 643 F.3d at 1042.

JDR
claims that Vance's and JLV's use of the LaGrange
name in its sale of welding rod constitutes trademark
infringement, unfair ...

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